Revenue Lifecycle Management is like a journey. It is the process that demonstrates the finest ways to connect your business with clients in a way that will help you maintain them for a lifetime. Revenue Lifecycle Management is not a service, a tool, or a result. Instead, it offers a comprehensive approach to business analysis, helping you view and comprehend your data in context and helping you develop a targeted customer interaction strategy suited to your organization’s distinct “fingerprint”.
The administrative and clinical tasks connected to claim processing, payment, and revenue generation are managed by institutions using the financial process known as healthcare revenue cycle management. Identification, management, and collection of patient service income make up the process. The financial process is essential for healthcare organizations to continue operating and providing patient care. Healthcare revenue cycle management is used by facilities to collect money and then cover costs.
The Basics of Healthcare Revenue Cycle Management Services
When a patient schedules an appointment to receive medical services, the healthcare revenue cycle management process begins. Once the organizations have received all claims and patient payments, the procedure is complete. The patient’s story of their life is not, however, as simple as it first appears. Administrative staff must handle scheduling, confirm insurance eligibility verification, and create patient accounts when a patient makes an appointment. The key to streamlining revenue cycle management procedures is pre-registration. During this phase, staff members build a patient account that contains information on medical histories and insurance coverages.
The healthcare provider must generate the submission of a claim and finish charge capture tasks following a patient visit. The patient’s health plan will pay the entity a certain amount of reimbursement based on the ICD-10 code that the physician or coder selects for the service. You might avoid having your claim denied by choosing the best code for the services. The services are converted into billable costs through the charge capture process. The practice submits a claim to a private or public payer for payment after creating it.
For healthcare systems, revenue cycle management does not stop there. The management of back-end administrative duties such as payment posting, statement processing, payment collections, and claim denials connected to claims reimbursements are still required.
Depending on the patient’s coverage and payer agreements, healthcare organizations often receive reimbursement for their services after an insurance company examines the claim. Claims can occasionally be rejected for several reasons, including incorrect coding, items missing from the patient chart, or insufficient patient accounts. Healthcare organizations must inform patients of any costs that insurance does not cover and collect payment from them. The goal of healthcare revenue cycle management is to create a procedure that enables businesses to swiftly get full payment for their services.
However, processing invoices and claims in healthcare revenue cycle management services typically takes a while. Claim disputes frequently last for months as payers and providers exchange information back and forth. The payer will either approve the claim and pay the provider during the remittance processing stage or deny the claim. Since patients frequently lack the money to pay medical bills immediately, revenue cycle management may also be a drawn-out process.
Value-based Care and RCM
According to analysts, RCM technologies will ultimately aid the industry’s move from fee-for-service to value-based reimbursement. Many RCM systems include analytics that gives payers and providers a more thorough understanding of their patient population. For example, they can see what percentage of their patients’ chronic diseases and track claims data must identify anomalies. This is crucial considering the recent legislation known as the Medicare Access and CHIP Reauthorisation Act of 2015 (MACRA), which promotes value-based treatment and payment for healthcare services.
Healthcare Revenue Cycle Management Difficulties
It can be challenging for enterprises to keep their revenue cycle management practices consistent considering the constantly evolving healthcare laws. One of healthcare businesses’ biggest challenges in revenue cycle management is collecting payments from patients at or before the point of service.
Although it may be more straightforward to say than perform, collecting payments before a patient leaves the clinic can save time and effort. Patient gathering for 74% of healthcare providers takes longer than a month, according to InstaMed statistics from 2020. Due to high deductibles and financial difficulties, many patients are unable to pay medical expenditures in full upfront.
Healthcare firms must balance timely payment collection success and patient retention. The internal dynamics of a healthcare organization, like physician productivity, patient volume, and service prices, are some of the things it can influence. Influencing outside variables, such as patient payments or insurance company claim assessments, is more challenging.
Health IT and EHR technologies have streamlined and improved healthcare revenue cycle management tactics. Several businesses use technology to manage claims throughout their life cycles, collect payments, and handle claim denials. In the end, these technologies enable a consistent flow of income. Successful medical practices have an optimized revenue management cycle or RCM; those without one frequently experience chaos. Most of the billing and coding-related issues that a healthcare system has been eliminated by an efficient RCM, which also aids in optimizing the billing and revenue collection procedures. After all, providing patients with top-notch healthcare is only one aspect of a healthcare organization’s total financial health.